Interprofessional conflict, accommodation, and the flow of capital: The ASB vs The securities industry and its lawyerS

In an earlier paper, Martens and McEnroe (1991) found that the Auditing Standards Board (ASB) substantially rewrote major sections of the exposure draft (ED) of Statement on Auditing Standards (SAS) No. 54 to accommodate the wishes of a special interest group, the legal profession. This study involves a similar examination of the development of SAS 72, from its status as an ED to its release as an official auditing promulgation. Specifically, an analysis is made of the positions existing in the ED for SAS 72, the comments submitted to the ASB, and the changes made to the final SAS in light of those comments. The results indicate that the ASB once again accommodated the desires of a special interest group; in this case, the securities industry and its lawyers. A reason for the accommodation is proposed in the context of certain sociological theories of the professions. It is suggested that the ASB, acting as an agent of capital, was convinced that a less restrictive standard was necessary in order to facilitate the role that underwriters play in the flow of investment capital.